Rules for Tax Debt Collection and Resolution

Last updated on September 25, 2023

The IRS follows certain rules and processes when collecting a tax debt. When the IRS discovers that you have unfiled returns, they will likely file a substitute tax return on your behalf to ascertain the amount you owe. If you filed a tax return and the taxes due were not paid, then the IRS will provide the balance in a notice.

If no response is received from the taxpayer and no efforts are made to resolve the issue, then the IRS sends additional notices. The government can eventually move onto collections actions, such as a federal tax lien and a levy.

Taxpayers can choose from a variety of payment plans when determining how to resolve a debt. The IRS has designed plans according to taxpayers’ different financial circumstances. The sooner the tax debt is resolved, the better.

When resolving a tax debt, it’s important to understand the rules and regulations of the IRS resolution options. It may be a good idea to consider finding a licensed tax professional to ensure your resolution gets completed correctly.